According to a report from
Antenna TV (via Bloomberg),
Cypriot President Nicos Anastasiades will tell the Eurogroup that
he doesn't have the backing in parliament to pass the
bill.

JPMorgan's Alex White discussed the possibility of this scenario
in a note to clients over the weekend, writing:

A ‘no’ vote, or a failure to bring the package before
parliament in the immediate term could have significant regional
implications. Germany has made clear that it won’t bring any
measure which does not include depositor haircuts before the
Bundestag.

The extent to which the region has played hard-ball with
Cyprus was indicated in Anastasiades' claim that he was
threatened with an immediate withdrawal of ELA support if he did
not commit to the deal as it stands.

In the event of a need to renegotiate, the path of least
resistance in our view would probably see an amendment of the
existing deal, such that the pain is redistributed to impact
uninsured depositors (we think there is a chance of the Cypriot
Government seeking to amend the terms in this direction before
bringing measures to parliament if it faces the prospect of
failure).

In effect however, the damage would already have been done
if Cyprus sees significant deposit flight, absent a
deal.In the context of the
Troika’s current disagreement with Greece on further
disbursements, and the likelihood of political dead-lock in
Italy, a return to a more stressful episode of the European
crisis cannot be discounted, in our view.

Should these hurdles be passed, longer-term we think there
is a possibility of legal challenge to the package, under both
Article 23 of the Cypriot Constitution, and under the European
Convention of Human Rights (ECHR) given the requirements of both
in respect of property rights.

Not getting the deal through
parliament this week – which could happen, given how intense the
debate will probably be – is the biggest near-term risk for
markets,
according to Wall Street strategists.